The very model of a modern economist

Once upon a time when I went to my publisher, he told me adamantly “Economics doesn’t sell.”

I was gobsmacked. “Economics, that tells us all about supply and demand and how to run a business or a household doesn’t make a quid?  How could that be?” I asked the great man of Australian publishing.

“Well, you see, my friend, “it’s the dismal science” explained my publisher.

Not to be deterred, I had a look at the origins of this term ‘the dismal science’ and whether it was an albatross around the neck of economics and its popularity. In my historical voyage of intellectual discovery I found out a few interesting things along the way, and some myths and realities about the history of economics and how it has been perceived in past times and in the modern day.

First things first about economics: it’s not dismal, it’s gay. When I looked up the term “dismal science” I found a fascinating history of how the label became associated with economics. It was found that the British historian Thomas Carlyle used the term in his debates with the Quakers and Baptists over the emancipation of slavery in the West Indies and his fears about what had occurred in the Irish famine.

Carlyle was debating the ‘Exeter-Hall Philanthropists who called for emancipation of black slaves in the West Indies whom he feared be worse off under the laws of supply and demand as free man, as had happened to free agricultural labourers in Ireland who perished by famine.  Carlyle is reported to have said in 1888:

“Truly, my philanthropic friends, Exeter-Hall Philanthropy is wonderful. And the Social Science – not a ‘gay science’, but a rueful – which finds the secret of this Universe in ‘supply and demand’ and reduces the human governors to that of letting men alone is also wonderful. Not a ‘gay science’ I should say, like some we have heard of: no, a dreary, desolate, and indeed quite abject and distressing one, what we might call, by way of eminence, the dismal science.”

In an absorbing analysis of the debate by the historian of economic thought, Peter Groenewegan, Caryle’s main contention is that slavery was better than the forces of supply and demand that had impoverished the Irish farm worker. Carlye further thought that slave owner had a mutual obligation to look after black slaves in the West Indies and thought that any move to emancipate them into a free labour market would make the West Indies a ‘Black Ireland’ in terms of economic misery. In fact, the whole debate about the West Indies and Ireland reminds me of Roddy Doyle’s film ‘The Commitments’ when the fledgling band manager Jimmy wants his (lily white) band to say: “We’re from Dublin, we’re black and we’re proud!”

Who would have thought a popular movie about a fledging rock band would have had its historical roots in the history of economic thought?

In any case, as a result of this chequered history, several myths about economics developed. Some are still hanging around today, like a dead cat in the middle of Anzac Parade, stinking to high heaven. Its troublesome origins have made a bit of mud stick.

Myth one: Economics is not ethical

It’s all about profit and welfare maximising, that is how to be selfish and what it means as a result. Hence the term ‘homo economicus’ about rational decision-makers individually pursuing their own ends. Or as my grandpa, who was a professional punter at the Randwick racecourse, used to say: “Always back the horse called ‘self-interest’. It doesn’t always win but you can guarantee that it will be a trier.”